edotco Cambodia: up to 750 new builds planned over next three years

Additional opportunities in energy management, IBS, small cells and lamp poles to supplement organic growth

While not a tower market that typically generates a lot of buzz, edotco has been steadily growing its tower portfolio and team in Cambodia since its entrance in 2012. Six years into its journey, we catch up with Phillip Wong, edotco’s country leader and Chief Regional Officer for Growth Markets to find out the latest in the towerco’s local operations, as well as the status of the country’s mobile market. With growing data demand and a supportive regulatory framework, edotco is confident in the value it can bring to the local stakeholders, especially as it looks beyond the traditional steel and grass towerco model.

TowerXchange: Phillip, for the readers who are not familiar with the Cambodian market, how would you describe the current telecom environment and ecosystem?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

Cambodia represents an emerging tower market with immense potential and opportunities. Having experienced strong economic growth over the last decade, mobile operators are faced with stiff competition given the booming consumption of mobile data. This provides tower companies like edotco the opportunity to play a very critical role, especially in terms of providing infrastructure access services.

Promising developments such as the launch of 4G, the rolling out of LTE and a light-touch regulatory approach are positive for the industry and its ecosystem.

To date, mobile penetration is over 110%. This growth in mobile connectivity will be a key driver in realising the Government’s vision of having 100% broadband service coverage in urban areas and 70% coverage in rural areas by 2020.

The lack of a mature telecoms infrastructure ecosystem remains a challenge, but our experience in developing and emerging markets positions us well to partner with the Government in addressing operational and geographical challenges in Cambodia.

TowerXchange: Could you please give us an update on edotco’s operations in the country?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

edotco (Cambodia) Co. Ltd. was established in May 2012 with just five employees and 150 tenancies. Our team has since grown to 26 employees and we now have approximately 3,500 tenancies.

Our current portfolio comprises over 3,100 towers of which we directly own and operate more than 2,100, and provide managed services to an additional 1,000. The towers we directly own represent about 24% of the total tower count in Cambodia.

TowerXchange: Previous estimates for towers in Cambodia was ~9,000. How does this compare to your understanding? What’s the average number of builds per year in the country?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

Based on edotco’s analysis of the Cambodian tower market, there are approximately 9,200 towers now.

edotco has plans to build about 200 to 250 towers per year for the next three years, in particular to meet the 4G and 4.5G capacity requirement of the MNOs. We also see a growing demand for small cells, IBS and lamp poles.

TowerXchange: And what is the status of the ~1,000 Mfone towers that eventually went to CooTel?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

CooTel collaborates with edotco Cambodia under an “Exclusive Agreement” where we provide managed services to their current portfolio of towers.

TowerXchange: What is the prevailing business model in the country for a towerco? And what is edotco’s approach?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

The prevailing business model has been predominantly property and asset focused. We try to improve our returns and pass through the cost benefits to operators through the diligent management of assets and increasing our tenancy ratios.

edotco is increasingly exploring new opportunities and business models to add more value to our customer proposition. One key area is passive energy solutions which we currently provide in other countries. Traditionally energy is still largely provided and managed by the operators themselves. However, we believe that as a towerco we are well positioned to extend the sharing concept to energy system provisioning and maintenance. With our strong focus on operational execution and through remote monitoring, we believe more efficient energy system management can create additional value for our customers in the future.

As mentioned earlier, we also see a growing demand for small cells, IBS and lamp poles and are steadily expanding our portfolio of innovative solutions to address Cambodia’s coverage and capacity needs.

TowerXchange: Site acquisition is always a challenge no matter what country or region. What is it like to secure ground rental in Cambodia?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

Securing ground rentals can be a challenge from landlords, neighbors and local councils. Challenges include multiple stakeholders to manage which results in increased time taken to secure sites. At edotco, we understand these challenges and continue to engage regularly with all the stakeholders involved.

Alongside these efforts we continue to provide solutions through innovative approaches like camouflage towers and special structures that blend in with different environments. This also helps ease the challenges of securing ground and building rentals.

Our solutions are developed with the entire ecosystem in mind and we conduct our businesses in different countries by fully complying with the local laws and customs.

We have robust due diligence and risk assessment frameworks in place which ensure that our business practices are sustainable and in line with our values.

TowerXchange: How about ease and speed of deployments? What have you seen change over the years?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

Both have improved over the years. A maturing regulatory framework in Cambodia and the enhanced skillsets among our employees, contractors and vendors have contributed positively to our deployment process.

We also do our best to reduce deployment time by providing our customers with administrative support so we can remove the load of paperwork and processing. Internally, we’ve improved our procurement processes by implementing a standardised framework which allows all parties to make fast decisions which also contributes to speeding up deployments.

MNOs are seeing the benefits of these value-added services and are increasingly partnering with us.

TowerXchange: In terms of operational ground realities, the last estimate was about 25% of the country being off-grid. Where does Cambodia stand right now and how is site energy being dealt with?

Phillip Wong, Chief Regional Officer, Growth Markets, edotco:

The number of off-grid sites have remained the same for the past couple of years, though the electricity footprint has increased from year to year with the support of both the private and public sectors. Operators prefer to manage this part of the business on their own and so far, four main operators have relocated their diesel generators to other off-grid locations.

There are no dominant players in the Cambodian energy market, and the industry is still heavily-reliant on fuel oil and diesel generators (DG). However, only a handful of companies are able to provide small-scale DG renting services to off-grid sites.

We believe that more can be done and have been working closely with MNOs to introduce energy efficient solutions including lithium-ion batteries, regeneration of batteries, high efficiency rectifiers and solar hybrid technology as part of our ongoing efforts to manage energy consumption and its impact on the environment. This underscores our commitment to be a long-term partner in nation-building initiatives in all the markets we have a presence in.

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